Happy Father’s Day

 

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Today was a warm and fulfilling Father’s Day.   I took the four offspring and their madre and her parents off to our traditional Father’s Day Lunch where we had a toothsome sup at our favorite restaurant complete w. sangrias out on the lanai. 

Then we followed that worthy repast with a late afternoon matinee (blessedly air conditioned, as it’s been over 90 for a week now).   We saw the highly acclaimed Toy Story 3 in “3-d” (sufficiently subtle that it did not bother my usually sensitive inner ear) and I can truthfully say it was the perfect Father’s Day movie, and just a great movie all around.   I might even pick up some DIS on Monday, so impressed was I by those Pixar geniuses all over again.

But this was a busy week, Father’s Day culminations aside, and none were more busy than the deep-mining dwarves of my portfolio that showered me with coyne (sic) even as I wheeled and dealed like a Soprano consigliari in Sinatra’s New York.

For those of you who think this recent market rip as a sign of light at the end of the tunnel, please disabuse yourself immediately.  You might as well ascribe the recent positivity to overzealous vuvuzallah (sp?) blowing as to positive economic news.

Make no mistake, this market is ripping on a combination of black smoke-sentiment rebound and fast money central bank printing.    As a result, stocks as a whole have risen, and my gold and silver plays (not to mention select platinum and palladium names) are looking Atlas holding up the world, but getting ready to shrug.

Last week I gave you RBY and BAA, which were up this past week 19.3% and 21.4% respectively. 

Yes, in one week.  And there will be moooore, on each, bless us both.

Even that damned elusive Pimpernel could not argue with those kind of results, but you must get them while they are hot, like slices of pizza thrown from the tenth story of important buildings.  

I don’t want to hear any complaints, either, as I illustrate my favourites (sic) which I have been recommending now for more than a full year of vociferous blogging.  

Remember my very favourite stock, SLW?  Well, it was only up a mere 8.5% last week.   But that only means you haven’t missed the entirety of the party.   In fact, I think it’s about to get started on the weekly here:

Then there’s my number two beauty, ANV.  It was also up a mere 12.4% last week, but I want to show you the daily on this one to illustrate the dramatic manner in which it made that increase last week.  Note how it, too, is approaching new highs?  Coincidence?

Maybe a little bit overbought on the daily, but that’s one you want to own for the long, hard times.  Weekly is a dream.

Then there’s my lovely EGO, up a mere 6.3% this week, but showing some appetizing possibilities as it too ends the week within a hair’s breadth of new all time highs.  Uncanny, no?  Check this daily out:

Some volume, wot?

Then there’s the grand-pap of them all, RGLD, which looks like it too wants to find new ground above $55 per share.  We may sell off a little bit of the last week’s 4.1% advance, but then we may just consolidate some of this overbought-ness and move on to new highs.    Let’s say I’m not selling any calls just yet:

That’s enough for now.   This should be an exciting week.  Watch the dollar index here.   If it breaks $85.00 here, as I’ve stated before, we could have some serious play in the fields of gold.   Keep an eye on CDE (up over 14%) and PAAS (up over 9.5% last week) for the silver stakes as well.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=aqlJl1LfDP4 450 300]

Love this version….

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Going up to the territory of Monsieur Le Docteur du Fly for a couple of days for business that could very well shake the foundations of Finance itself..

Or barring that, I’ll at least grab a decent steak and catch up w. some friends.    Whatever the case, I will be “around”  these premises only sporadically as I cannot guarantee that my connections will be up to speed or that I won’t have all of my time accounted for whilst up there.

I’ll leave you with your rudders tied for the moment, as I think we may get a little bit more grinding into the Friday expiration, with the possibility of a last pop into that date after more muddling tomorrow.   The dollar bounced back very slightly today an ended in the lower part of it’s track for the candle pattern.   The golds, perhaps sensing continuing weakness in $USD are continuing to crank, almost in step-fashion across the board.

Today RBY finally took off as predicted last weekend, up over 5.5% today:

  

RBY looks like it may be finally launching off that consolidation of the handle.  I expect more this week.

 BAA — which took off right away on Monday as you recall — continues to rise, and has now completely recouped it’s 19% discount from the secondary offering level I’d mentioned over the weekend…. Recouped it… AND MORE.

As you can see on that weekly chart’s stochastics… BAA has a ways to go as well, and I believe it will.

I continue to see strength in my favourite stocks, which fills me with untold joy, as I’ve pallet loads of them.  SLW looked great today, as did ANV and especially IAG.   I continue to like EGO here as well, not to mention RGLD, EXK and PAAS.   Eat, and enjoy.

Best to you all, hope to speak to you soon.

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“Dollar Bill,” the Three Legged Horse 

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The formidable monster dollar days are as done as well oiled-Gulf cod, with a side of Pelican mashies.   The Euro may continue to break down and every paper currency in the universe could go the way of all tinder, but I do not think any of it will help our much abused dollar.

Nope, you see Bernanke caught that acrid whif of deflation over the last fortnight, and he knew exactly what he had to do.  And he did it — he opened lines of credit for crappy multinational and Euro banks to stabilise (sic) their burgeoning debt crisis.   He used our bucks to help sterilise (sic) bad Greek and Carpathian debt like it was mere Fannie Mae mortgages or something similar.

And what a time to do so — when the dollar was as healthy as a three legged horse in a horse amputee ward at the veterinarian hospital.   Heck, you might have even ridden that horse, were you forced too.

To the abbatoir.

So Bernanke saved all the legless horses in Europe with his three legged horse and guess what… the bill has come due and it’s stipulates right here in ten point Hellenic script: “more legs.”  

More legs down as the printing presses continue to fly and whirl and shuttlecock and do all things printing presses do whilst churning out fresh greenback, further diluting their wirth (sic) to one an all.   Note how in the weekly, we’ve got a two week breakdown in the works since our tumultous “third top” high back in early June….

As you can see $85.00 is my near term goal, and that should coincide with a nice spike in the overall markets (not just the PM’s though they should surely benefit too) after we work off the overbought high so adroitly noted in The PPT .   

You can see $85.00 makes sense on the daily as well:

$85 is very close to our 50-day EMA as well, which further reinforces that target as a resting point, if not a full rebound target.

What will happen as a result of this continuing dollar meander down?   I’m afraid that in the intermediate term, it’s bullish for the markets — even if only artificially so.   Luckily, one can better guard his well-earned profits by placing them in an operating company that measures its assets not in dollars, but in something more substantial.  

That’s correuct, “the precious” is just that substanital asset, and mining operators have that, and leverage too.

You know my favourites as they never fail to please… ANV, SLW, EGO, IAG, and PAAS for now.   Keep a firm hand on the best, and you will have ample “excess capital” to play with the rest, like the other evenings’ offerings (BAA and RBY).

Gun to my head best immediate picks :  TC, TCK, CREE, ANV and IAG.

Stay safe, my friends.

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No, it’s not what you think.   I’m not packing the goats and chickens (I have a head chicken, I’ll have you know) and donkeys up for a caravan trip to Romania, even though that’s the legendary land that spawned Vlad Dracul.

Otherwise known as “Gapping and Yapping.”   No scheiss, join The PPT and check it out.  He’s the real thing.

No, no plans for Romania, just yet.   Instead my title refers to the oft-promised Dow Theory Analysis of the Transports that I’d mentioned over last weekend.   Despite the hotness of yesterday’s gold pick [[BBA]], I will digress in a wood less traveled by, and momentarily  talk about the Dow Transports and how they are giving us nice signs, despite the prevalent gloom and doom.

The Transports, as I’ve mentioned before, are the key to the Dow Theory.   If they do not confirm, then there is no bear… yet.    And thus far, the Dow Jones Transportation Index [[$TRAN]] has not confirmed a lower low vis-a-vis those February lows which we made on the SPY recently.  Note how the weekly shows the non-confirmation:

As you can see on the weekly, the Trannies have gotten back above that very important 61.8% Golden Ratio Fibonacci Line.   I believe that line will serve as support, even if we enter into a temporary oversold condition here, kudos to The PPT.

On the daily, it’s a similar exercise in rebuilding:

 

We’ve had five days of nice solid recovery, the last two of which have broken that downtrend line with some vim.   Though today connotes a bit of oversold-ness, I’d contend we will find some support on that downtrend line, and better, that the Transports will lead us higher again.

Before you give me a rose tiara and call me Polyanna, please recognize there’s only one reason for the stock market to be rallying right now, and it stems from the sound of that “clacking” that you hear even more disinctly than the Vuvazellas (sp?) contributing to the beehive noises at the World Cup. 

Remember that dollar weekly chart from about a week back?  Well, coincidentally, Old Uncle Green-backs is still following that script… I touched nothing on the narrative here, just updated the chart itself…

I think we’re headed into more dollar doom.  Probably not all at once, but herky-jerky, back down the pike.  That means inflating asset markets, no matter what the CPI says.

Act accordingly.   And for goodness sakes, get into The PPT so you can tell your grandkids about saving their college tuituons.  Best to you all.

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UPDATE:  Drunken Dem Congress Critters Gone Bad!!   Time to Retire This Fist-First Nut,  Tarheels:

[youtube:http://www.youtube.com/watch?v=_oqIP9yagkQ 450 300]

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I got a question in my comments section yesterday about two smaller Canadian juniors — RBY and BAA  — that we’ve discussed in the past, and which look to be ready to turn back north, or disappear down the drain for the duration.  

Note, even in this wildly successful bull market for gold and silver, there are still doggy outliers with such grandly incompetent management (or who have the misfortune to operate under the purview of such confiscatory national governments) that they have not benefitted in the “rising tide.”   

I often cite the South African DROOY, as an example of said phenomena, but even poorly managed HL and CDE can be placed in that category.   The difference between DROOY and Idaho-based CDE and HL — where I would not invest in the former, but have done so in the two latter — is in nationalization risk.   In this rising tide, CDE and HL, though managed ham-fistedly, might actually become buyout candidates thanks to their assets in the ground.  

DROOY on the other hand, increasingly becomes a nationalization candidate as it’s home nation (South Africa) slides further into the traditional socialist morass under the leadership of the ANC.  Happy World Cup, by the bye, fellahs.

Back to our two small Canadians, who are, again, very low nationalization risks.  With Canada’s strong support for it’s PM industry, they maybe even lower risk than the gold miners of the United States (lol!).   I will show the weeklies to illustrate the long term trends, as usual.    BAA, which just a month back raised over $130mm at $2.05 Canadian (or $1.98 U.S.)  a share, is showing a possible bottoming here, which is not atypical a month after a major dilutive action.

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One quick aside on the major risk of juniors in a gold BULL market (the major risk in a non-bull being that they are actually held accountable for their crappy earnings, lol!).  In a non-nationalizing State environment, the greatest risk to junior investors is in dilution.   Many many many managers of these juniors (rightfully) see an increasing stock price (thanks to speculation) being an opportunity to raise cheap capital.   And even if the capital is not so cheap, the market will assign a discount to it upon a dilutive offering anyway.   Hence, in the case of BAA, we had a large new issue of equity sold at $1.98, but saw the stock pull back (this week!) all the way to $1.61 — a 19% discount from the original offering price.  That’s HUGE in a bull market for gold.

The good news is that BAA is now going to be a much smaller dilution risk going forward, and in fact, one might even say we can take that risk off the table for up to 24 months… which may mean all the way to the end of this bull.  With such a capitalization under their belts, BAA also gains more leverage in an M&A scenario.  Because of the fresh capital, they will not be forced to accept a low bid to monetize their assets, as this offering gives them additional dry powder to do so internally (for the time being).   

Long story short, if you owned BAA prior to this dilutive event, you  are pissed about the set-back (although, if you are like me, you are long used to it in these juniors).   This is one reason to greatly diversify your junior picks, either through a large group of names (as I’ve done) or via ETF’s like GDXJ and SIL (less bang for the buck, but a greater diversifier for those w. smaller accounts).

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The good news is that now that BAA has taken the dilution risk off the table, this may be a good time to begin accumulating at these prices… Note our weekly chart:

We could see this thing drift down another 10 cents or so (which is a lot, admittedly) if there is a consolidation of the latest gold pop, but I think the I-bankers at CIBC World Markets (the underwriter of the shares at $1.98) would be catching a lot of grief were it to descend much lower than the $1.55 range (a 22% discount and home to much chart support).    I may add to my holdings come Monday.

Note:   a large part of BAA’s holdings are in The Democratic (hah!) Republic (ha-ha) of Congo, so there is nationalization risk, but less so, thanks to BAA‘s being a Canadian-resident company.  Ironically, foreign companies– especially those based from Western NATO allied countries — are more immune to nationalization in rogue states, whose loosely held governments are dependent on their income to survive.  In fact, because SA is not a rogue state (i.e., essentially government-less), it actually poses a greater confiscatory risk, thanks to the Dunning Kruger effect posed by imagined competancy  (see Venezuela as a great example, or even the Obama and Bush Administrations), than the tenuous ex-Zaire of DRC.

Also, please keep in mind that while BAA may not be subject to nationalization risk, there’s still higher political risk due to the fighting going on within it’s host state and on it’s border states in the Congo.

Rubicon Minerals’ (RBY‘s) position is a lot more secure, with most of their assets residing in Canada and the U.S.  That said, they too have had a sharp pullback from highs (see chart below).   They had their big dilutive offering (they bought back debt too) in 2009, with over $210 mm in “bought deal financings,” which are essentially privately placed public equity (like PIPES here in the US).

I also like the chart, which seem to indicate a cup and handle, with a subsequent breakout.   Now it seems we are consolidating that breakout and it may be time to “nibble” once again.   I may also look to RBY on Monday.

 

Note, I will be increasingly selling down my non-gold & silver  movers, save for a couple of small positions in UPS and MON and perhaps CREE.   I think we are getting to a point where a concentration in PM”s may be again warranted.  This will be especially true if the dollar starts to break down here, as I think it may.

Best to you all, and I will try to get a piece in on the TRANnies before weekend is out.

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[youtube:http://www.youtube.com/watch?v=KwIe_sjKeAY&feature=related 450 300]

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Maybe that’s what they’ll blame this latest blizzard of fresh cash on… the need for fresh liquidity in case of an emerging chav riot should the U.S.A. (perfect in every way save for soccer proficiency) beat Old Blighty in the first round of the World Cup on Saturday.

Not that it’s likely, but what more significant excuse does Ben need to flip the machines on?

They were on today, you can be sure.    On the meltup I like diggin’ foreign companies for $100, Alex, including PBR from Brasilia, and BHP from Ozzieland .  Only The PPT could be more acute, imo.

Don’t forget about TCK, and TC as possible forced bodies (like RTI) in the grand smelter of shrinking dollars.  Soon your dimes will be encased in molybdenum and shot off into space, as appropriate.  TIE is screaming here, and past it’s 38.2% Fibonacci retrace… get some!

The rest (of your non-gold port), I would take care of  ASAP, but for those counting on a big Christmas, Id look for the past leaders here to revisit their highs.  Yes, that includes CREE and GMCR. 

Get ye some, and join the revelry in The PPT, now and forever.   See if some of that space magic doesn’t wear off, to your benefit.

Salud!

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